The KOSPI slipped below the 5,500 mark shortly after the open on Oct. 26, then quickly pared its losses on simultaneous buying by foreign and institutional investors. With caution building ahead of what is being called a “super week” packed with the U.S. Federal Open Market Committee (FOMC) meeting and earnings from major technology companies at home and abroad, bargain hunters flowed into large-cap semiconductor stocks.

According to the Korea Exchange, the KOSPI opened at 5,499.05, down 0.92% from the previous session. It then rebounded, recovering to 5,546.71 around 9:10 a.m. and narrowing its decline to 0.06% from the prior day. By investor type, foreign investors net-bought 28.3 billion won (approximately $21.4 million) and institutions net-bought 7.8 billion won (approximately $5.9 million), while retail investors net-sold 42.8 billion won (approximately $32.4 million).

Fortunes diverged among top market-cap stocks. SK Hynix rose about 2% to lead the index’s rebound, while Samsung Electronics, SK Square and Samsung Electro-Mechanics stayed flat. LG Energy Solution and Samsung SDI fell about 2%, Hyundai Motor dropped about 1%, and Hanwha Aerospace and Doosan Enerbility weakened around 1%. By contrast, Samsung Life Insurance and Hana Financial Group gained about 1%. By sector, insurance, electrical and electronics, and manufacturing held modest gains, while metals, securities, food and tobacco, and chemicals were weak.

The biggest variable for the market this week is the October FOMC meeting. Although September consumer price index (CPI) data came in above market expectations, heightening inflation concerns, some observers expect the Federal Reserve’s hawkish tone to soften from last month amid recent financial market turbulence and growing credit risks at artificial intelligence (AI) infrastructure companies.

“The key at the October FOMC is not the hold itself but the tone of Fed Chair Kevin Warsh’s remarks on the future tightening path,” Han Ji-young of Kiwoom Securities said in a report. “If the Fed maintains a cautious stance on further tightening, it could ease some of the uncertainty over the rate path tied to Fed policy.”

Earnings events cluster in the latter half of the week. In the U.S., major hyperscalers including Amazon, Alphabet and Microsoft will report results. As market attention on AI investment has shifted from spending levels to profitability and cash generation, the key question is whether large-scale capital expenditure is translating into actual cloud revenue and improved cash flow.

In South Korea, earnings and conference calls from Samsung Electronics and SK Hynix are the key variables that will set the market’s tone. Market attention is focused on demand and pricing outlooks for high-bandwidth memory (HBM) and commodity DRAM, supply-demand shifts from capacity expansion, and the sustainability of 2027-2028 earnings. “In Samsung Electronics and SK Hynix’s results, the restoration of earnings credibility and the specifics of additional shareholder return policies will be the turning point that calms stock price and supply-demand jitters,” Han said.

The specific schedule is concentrated on Oct. 28 and 29. SK Hynix will hold its third-quarter earnings conference call at 9 a.m. on Oct. 28, and Samsung Electronics at 10 a.m. on Oct. 29. Samsung Electronics already disclosed preliminary results on Oct. 8: 195 trillion won (approximately $147.5 billion) in revenue and 107.4 trillion won (approximately $81.2 billion) in operating profit. SK Hynix’s board approved 40 trillion won (approximately $30.3 billion) in share buybacks and cancellations on Aug. 19 and set a goal of returning more than 50% of cumulative free cash flow (FCF) for 2025-2027 to shareholders.

The competitive landscape in HBM and DRAM is mixed. Based on second-quarter 2026 revenue, HBM market share was SK Hynix 50%, Samsung Electronics 33% and Micron 18%. In overall DRAM for the same quarter, Samsung Electronics held 38%, SK Hynix 25% and Micron 24%. Samsung Electronics leads in DRAM but is chasing SK Hynix in HBM. Counterpoint Research projected that Samsung’s share will gradually rise as HBM4 shipments ramp up.

CategorySK HynixSamsung ElectronicsMicronHBM revenue share50%33%18%DRAM revenue share25%38%24%

Note: Based on Counterpoint Research second-quarter 2026 revenue. Most HBM revenue is still HBM3E, with HBM4 shipments expected to ramp up in the second half.

Securities firms also laid out KOSPI scenarios based on the outcome of next month’s U.S. midterm elections. The midterms will be held on Nov. 3, with all 435 House seats and 33 Senate seats up for grabs. Daishin Securities estimated a 63% probability of a “blue sweep” in which Democrats win both chambers, 28% for a divided Congress, and 8% for a “red sweep” in which Republicans take both chambers. Lee Kyung-min of Daishin Securities said the firm maintained its fourth-quarter KOSPI forecast range of 5,200-6,700 under the blue sweep or divided Congress scenarios, while a red sweep could lower the floor to 4,950. The assumption is that the U.S. 10-year Treasury yield would rise 15-30 basis points and the won-dollar exchange rate could climb to 1,360-1,400 won.

CategoryDaishin Securities Estimated ProbabilityQ4 KOSPI OutlookBlue sweep (Democrats win both chambers)63%5,200-6,700Divided Congress28%5,200-6,700Red sweep (Republicans win both chambers)8%Floor could fall to 4,950

Note: The first-quarter 2027 forecast was given as 6,000-7,500, with a central forecast of 6,200.

Lee recommended responding by monitoring rate and exchange-rate trends rather than trying to predict the election outcome. If the KOSPI falls below 5,600 before the election, investors should use it as an opportunity to buy in tranches, and if a red sweep is confirmed, they should adjust the pace of buying based on a U.S. 10-year yield of 5.3% and a won-dollar rate of 1,380 won. By sector, semiconductors, shipbuilding and biotech were named top picks regardless of the election outcome, with securities, internet and secondary batteries as supplementary sectors under a blue sweep, and defense, nuclear power and insurance under a red sweep.

Retail investors have been turning to leveraged products amid the recent sharp selloff. According to Korea Exchange and Koscom ETF Check data, retail investors net-bought 315.4 billion won (approximately $238.5 million) of 14 single-stock leverage ETFs tied to Samsung Electronics and SK Hynix from Oct. 1 to 23. Seven SK Hynix-related products accounted for 226.3 billion won (approximately $171.2 million) and seven Samsung Electronics-related products for 89.1 billion won (approximately $67.4 million). Retail investors had bought 2.7728 trillion won (approximately $2.1 billion) of these products in July, then switched to net selling in August-September after regulations tightened, including higher investment deposit requirements at the end of that month. This month they have turned back to net buying. Over the same period, 1.0448 trillion won (approximately $790.2 million) flowed into “KODEX Leverage” and 256.4 billion won (approximately $193.9 million) into “KODEX Semiconductor Leverage.”

Money betting on a semiconductor rally also poured in from overseas. According to the Korea Securities Depository’s SEIBRO data, South Korean investors’ net purchase settlement amount for U.S. stocks came to about $4.8 billion from Oct. 1 to 22, of which the Direxion Daily Semiconductor Bull 3X Shares ETF (SOXL), which tracks three times the daily return of a U.S. semiconductor index, accounted for $3.54764 billion, or 73.9% of the total.

Also on Oct. 28, Japanese semiconductor test equipment maker Advantest will report second-quarter results for fiscal 2026. As HBM test demand is read as a gauge of the memory industry’s temperature, this week is a period when South Korean and Japanese semiconductor earnings overlap for Japanese investors as well.

There is also a link to Taiwan. Starting with HBM4, SK Hynix is producing base dies using TSMC’s advanced logic process, and plans to apply TSMC’s 3-nanometer process to HBM4E base dies. The structure is one in which South Korean memory makers’ HBM competitiveness is intertwined with demand for advanced processes at Taiwanese foundries.

The key schedule for this week is as follows.

The market sees this week’s domestic and overseas earnings as the watershed for a rebound. With Samsung Electronics and SK Hynix accounting for nearly half of the KOSPI’s market capitalization, the prevailing view is that the index will struggle to find a clear direction until the two companies’ earnings and shareholder return measures are confirmed.